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Tag: Volkswagen

As Germany warns of a disaster for domestic employees of Volkswagen AG, fallout from the company’s emissions-cheating scandal threatens to reach its largest producer of cars for the US: Mexico.

VW has already cut Saturday shifts at its Puebla factory, the largest stand-alone plant making VW brand cars outside of Wolfsburg, where the company is based. That has led to increased concern among the estimated 15,000 workers that jobs may go next.

“Volkswagen messed with all of us,” said Alfredo Rodriguez, 29, who fears his lack of seniority at the factory makes him more vulnerable. The father of two boys 6 months old and 8 years old got a full-time contract only three years ago, and now helps install the wheels on the cars being built. “The thing that worries me most is we don’t know what’s coming.”

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Volkswagen (VW) plans to open a new factory in Puebla and is currently processing authorization forms that are needed to begin its operations. According to a trusted source, it will be located near the Audi plant built in the municipality of San Jose Chiapa, Puebla.

The official announcement will be released in the second half of this year.

If you’ve ever been to Mexico City, chances are you’ve sat in an old Volkswagen Bug taxi, painted in muted red and gold, stuck in Mexico City’s notorious traffic. “Here we call them ‘Donkeys,’” says Victoriano Luna, a taxi driver who has been driving a Bug for 32 years. “A horse can run fast, but it doesn’t endure. A donkey does endure, just like this car.”

Volkswagen first came to Mexico in 1967, when it opened a plant in Puebla, a few hours drive from Mexico City. For decades, the Bug was the biggest-selling car in the country. Today, the Peubla plant has expanded to become the largest auto factory in North America, employing 18,000 people. It’s a state-of-the-art facility full of industrial robots and blinking computer equipment. The plant has the capacity to produce 2,500 cars a day, in popular models such as the Jetta and Golf.

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Volkswagen AG (VOW), Europe’s biggest carmaker, plans to build its best-selling Golf hatchback in Mexico in a push for market share in North America, where it trails competitors. The preferred shares hit a 20-year high.

“With its existing infrastructure, competitive cost structures and free-trade agreements, Mexico is the ideal location to produce the Golf for the American market,” Hubert Waltl, the head of production at VW’s passenger car brand, said in a statement dated today and obtained by Bloomberg News.

Volkswagen AG, Europe’s largest carmaker, will build a $550 million engine plant in Mexico as the automaker expands in North America, said Otto Lindner, president of the company’s operations in the country. The plant in Silao will produce 330,000 engines a year for cars built in Puebla, Mexico, and Chattanooga, Tennessee, Lindner told reporters at an event in Mexico City. Construction will begin next month, and the factory will begin operations in 2013.

The plant will be Wolfsburg, Germany-based Volkswagen’s first in Mexico outside of its Puebla complex, where the company has operated for 40 years and assembles the Jetta, Golf and New Beetle models.

“Now we are making the decision to establish a second productive unit in Mexico, a necessary step to continue with our growth strategy in the region,” Lindner said in a Spanish- language statement.